- Global shares sink, following 7.3 percent drop in Japan's Nikkei (Reuters)
- When all fails, pull a Kevin Bacon: Japan Economy Chief Warns Against Panic Over Stock Sell-Off (BBG)
- White House Feeds IRS Frenzy by Revising Accounts (BBG)
- In any scandal, lying to Congress is tough to prove (Reuters)
- Debt limit resets at higher level, budget impasse grinds on (Reuters)
- China factory data to test political calculations (FT)
- European Leaders Saying No to Austerity (BBG)
- And yet, nobody wants in anymore: Iceland’s new coalition government suspends EU accession talks (FT)
- Oil Manipulation Inquiry Shows EU’s Hammer After Libor (BBG)
- The Fed Squeezes the Shadow-Banking System (WSJ)
- Diamond Said to Weigh Backing Barclays Alumni in Venture (BBG)
- Spain’s Private Jets Disappearing as Tycoons Cut Flights (BBG)
Overnight Media Digest
* Hundreds of JPMorgan Chase & Co employees have been redeployed to help the bank resolve its mounting regulatory troubles, said people familiar with the effort. The number of people devoted to the task is likely to double by year end as the largest bank in the United States responds to heightened scrutiny from its regulators, according to people familiar with the effort.
* General Electric Co is thinking more seriously about selling off large parts of its financial business, which by itself would be the country's fifth-largest bank and which investors want to shrink.
* Ford Motor Co said it would stop producing cars in Australia in 2016, foreshadowing hefty job losses in a setback for a government that has invested heavily in propping up the country's automobile industry.
* Some of the biggest U.S. companies, including Google Inc and FedEx Corp, have quietly removed hundreds of offshore subsidiaries from their publicly disclosed financial filings over the past several years. The vanishing subsidiaries don't stem from asset sales or corporate restructuring. Companies across industries say they are taking advantage of Securities and Exchange Commission rules that demand disclosure only when subsidiary operations are "significant."
* U.S. automakers are accelerating production lines and in some cases, even canceling the North American industry's traditional summer factory shutdowns to meet strong demand. The plans highlight the Detroit Three automakers' recent market share gains against Japanese rivals and the auto industry's prime position in the U.S. economic recovery. Car sales have roared ahead this year even as retail spending on clothing and other goods remains tepid.
* The landscape for proxy advisers is getting rockier. Big firms that sell recommendations on how to vote in corporate elections are losing some of their relevance, as companies more aggressively court key investors ahead of big votes and those investors handle more of the voting analysis themselves.
* The plan to assure safety in factories in Bangladesh, forged after a
deadly collapse, could put American retailers at risk for litigation,
some specialists say.
* Born overseas and educated in the United States, workers in the heart of the technology industry are in a kind of suspension as the Senate considers the immigration bill.
* Hacking in China thrives across official, corporate and criminal worlds and is openly discussed and promoted, whether for breaking into private networks, tracking dissent or stealing trade secrets.
* JPMorgan Chase is redoubling its efforts to move beyond a big trading loss following a resounding shareholder endorsement to keep Jamie Dimon as both chairman and chief of the bank.
* While Wednesday's Internal Revenue Service hearing felt like an unforgiving, angry inquisition, senators seemed halfhearted in their desire to beat up on Apple, which has been accused of dodging taxes.
THE GLOBE AND MAIL
* A draft report on Prince Edward Island Senator Mike Duffy's expenses clearly shows a Conservative-dominated committee removed several key sentences that would have cast him in a more negative light. A copy of the report obtained by The Globe and Mail contains 10 paragraphs, whereas the final version from the Senate internal economy committee has only seven.
* Toronto Mayor Rob Ford has been sacked as coach of the Don Bosco Eagles and told he can forget about a football post at any school in the Toronto Catholic school board, putting an end to a volunteer effort that brought trouble and triumph to the city's beleaguered leader.
Reports in the business section:
* Texas-based Valero Energy Corp will invest as much as C$200 million ($193.51 million) in its Quebec refinery if Enbridge Inc proceeds with its plan to reverse its Line 9 pipeline, a project one Quebec business leader described on Wednesday as critical to the province's refining and petrochemical industry.
* More than 1,500 mourners were leaving a Hamilton hall at the end of an emotional public funeral for Tim Bosma on Wednesday when the mood was lifted, just a little, by news that a second man was arrested in his shocking murder case.
* Senators should disclose their expenses just as cabinet ministers do, the top Conservative in the Senate says, meaning the details of every trip and every receipt could be made public. The comments from Senator Marjory LeBreton came as the Conservatives began their push in the Senate to tighten spending rules on travel and housing allowances. Approval of the changes is unlikely to occur until next week at the earliest with the Liberals accusing the government of bulldozing through its reforms.
* Hunter Harrison, Canadian Pacific Railway Ltd's chief executive, fired back at some of the railway's union leaders on Wednesday after they expressed concerns this week that a restructuring underway at the railway may be contributing to several high-profile derailments, including one in Saskatchewan on Tuesday that spilled more than 68,500 litres of crude oil on the ground before it was contained.
* New England is in an uproar over a pipeline reversal that would allow Canadian oil sands to be transported from Montreal to Portland in Maine, en route to global markets. Last month, Vermont's environmental regulators ruled that the reversal would trigger "substantial change" and will require a permit. New Hampshire Governor Maggie Hassan has written to U.S. Secretary of State John Kerry pleading to "protect New Hampshire's economy and environment".
CHINA SECURITIES JOURNAL
-- Combined profits at China's state-owned enterprises rose 5.3 percent to 689 billion yuan ($112.38 billion) in the first four months of 2013 from a year earlier, the finance ministry said in a statement.
-- China's President Xi Jinping will meet U.S. President Barack Obama in early June, a widely-watched meeting which researchers expect will focus on strengthening ties between the world's top two economies.
SHANGHAI SECURITIES NEWS
-- Chinese consumer spending intentions rebounded to their highest level since the third quarter of 2010, according to a report from information services firm Nielsen.
-- Corporate business travel in China is expected to increase 15.1 percent in 2013, according to a study by AirPlus International. China is now considered the fastest-growing market for the sector.
-- Foreign direct investment in Shanghai rose to $1.6 billion in April, up 14.9 from a year earlier, driven by strong investment in the city's manufacturing sector.
* Building products maker CPG International is being prepared for a sale by its private equity owner, a deal that could fetch between $1 billion and $1.5 billion, according to three people familiar with the matter.
* A board member at Italy's troubled lender Monte dei Paschi di Siena is being investigated over allegations of breaking insider trading rules and has been suspended, a judicial source said on Wednesday.
* Private equity-controlled power firm Alinta Energy is planning a $1 billion-plus debt issue in the U.S. term loan B institutional market to refinance maturing debt, banking sources familiar with the deal said, joining a growing number of Australian borrowers attracted by the terms and pricing available.
* General Electric Co is considering listing its consumer finance operations to fund more share buybacks and strengthen focus on its industrial businesses, its chief executive has indicated, the Financial Times reported on Thursday. ()
* Title insurer Fidelity National Financial Inc and buyout firm Thomas H. Lee Partners are in advanced talks to acquire mortgage service provider Lender Processing Services Inc , a source familiar with the matter said.
* Blackstone Group LP and Prologis Inc have agreed to buy a portfolio of 17 million square feet of warehouse and distribution centers whose majority owner is Lehman Brothers for about $960 million, two sources familiar with the deal said on Wednesday.
* Carrefour, Europe's largest retailer, agreed to sell its remaining 25-percent stake in a Middle East joint venture to local partner Majid Al Futtaim (MAF) for 530 million euros ($682.45 million), MAF said in a statement on Wednesday.
* India's Srei Infrastructure Finance Ltd is poised to buy the domestic banking unit of nationalised Austrian lender Hypo Alpe Adria for 65.5 million euros ($84.34 million), the newspaper Die Presse said.
* A team including former General Motors Co executive Bob Lutz and China's largest parts maker is looking to buy Fisker Automotive for $20 million, a fraction of the "green" car company's estimated worth almost a year and a half ago.
Fly On The Wall 7:00 AM Market Snapshot
Atwood Oceanics (ATW) upgraded to Buy from Neutral at Goldman
Demandware (DWRE) upgraded to Conviction Buy from Buy at Goldman
Diamond Offshore (DO) upgraded to Neutral from Sell at Goldman
FactSet (FDS) upgraded to Overweight from Neutral at Piper Jaffray
Hewlett-Packard (HPQ) upgraded to Hold from Underperform at Jefferies
Pacific Sunwear (PSUN) upgraded to Buy from Hold at Topeka
Seagate (STX) upgraded to Buy from Hold at Deutsche Bank
Thomson Reuters (TRI) upgraded to Neutral from Underweight at Piper Jaffray
VeriFone (PAY) upgraded to Buy from Neutral at SunTrust
Blue Nile (NILE) downgraded to Sector Perform from Outperform at RBC Capital
Devon Energy (DVN) downgraded to Neutral from Overweight at JPMorgan
Fabrinet (FN) downgraded to Hold from Buy at Deutsche Bank
Flextronics (FLEX) downgraded to Hold from Buy at Deutsche Bank
Patterson-UTI Energy (PTEN) downgraded to Sell from Neutral at Goldman
Prosperity Bancshares (PB) downgraded to Market Perform at BMO Capital
Realty Income (O) downgraded to Sell from Neutral at Goldman
ReneSola (SOL) downgraded to Underperform from Neutral at Credit Suisse
Sanmina (SANM) downgraded to Sell from Hold at Deutsche Bank
Choice Hotels (CHH) initiated with a Hold at Stifel
CoStar Group (CSGP) initiated with an Outperform at Wells Fargo
Gartner (IT) initiated with a Market Perform at BMO Capital
Hyatt Hotels (H) initiated with a Hold at Stifel
IHS Inc. (IHS) initiated with an Outperform at BMO Capital
Johnson & Johnson (JNJ) coverage assumed with an Underperform at Credit Suisse
Marriott Vacations (VAC) initiated with a Buy at Stifel
PDC Energy (PDCE) initiated with an Outperform at RBC Capital
Solera (SLH) initiated with a Market Perform at BMO Capital
Wyndham (WYN) initiated with a Buy at Stifel
J.C. Penney (JCP) entered into new $2.25B credit facility
Hewlett-Packard (HPQ) CEO Whitman said “encouraged with where we are” with turnaround
FDA panel voted 13-3 that Merck (MRK) insomnia drug safe in low doses, Bloomberg reports
Nordion (NDZ) divested Targeted Therapies business to BTG for $200M
Royalty Pharma lowered acceptance threshold to 50% for Elan (ELN) offer
Signet Jewelers (SIG) raised Kay, Jared store openings view to 70-80 stores in FY14
Companies that beat consensus earnings expectations last night and today include:
HEICO (HEI), Shanda Games (GAME), L Brands (LTD), Synopsys (SNPS), Workday (WDAY), Pacific Sunwear (PSUN), Hewlett-Packard (HPQ), PetSmart (PETM), ValueVision (VVTV)
Companies that missed consensus earnings expectations include:
Taomee (TAOM), Quality Systems (QSII), Bristow Group (BRS), 8x8 Inc (EGHT)
Companies that matched consensus earnings expectations include:
Pactera (PACT), Semtech (SMTC), DryShips (DRYS)
- SoftBank (SFTBF) is readying a plan to allow the U.S. government an unusual level of influence over the operations of Sprint Nextel (S), a concession to ease security concerns raised by the proposed cross-border takeover, the Wall Street Journal reports
- Discovery Communications (DISCA) is today launching its first online video network, with original series available free, hoping to capture younger viewers harder to reach through traditional TV, the Wall Street Journal reports
- Russia's second largest bank VTB wants to sell its stake in Societe Generale's (SCGLY) Russian unit Rosbank and may part with it by the end of the year, according to the Kommersant daily, Reuters reports
- Major companies should disclose how much tax they pay in each country where they operate, says Michel Barnier, the European commissioner in charge of drafting business regulation. The move follows a report this week that Apple (AAPL) paid little or no tax on tens of billions of dollars in profits channeled through Irish subsidiaries, Reuters reports
- U.S. bankers and insurers (BAC, JPM, AIG, CB) are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis, Bloomberg reports
- Infosys (INFY) CEO S.D. Shibulal says the worst may be over for India’s second largest software-services provider, which slid 17% in the past two months. But investors are not convinced, Bloomberg reports
Apricus Biosciences (APRI) files to sell common stock
AvalonBay (AVB) announces 7.87M common stock at-the-market offering
Blackstone Mortgage Trust (BXMT) 22.5M share Secondary priced at $25.50
ChannelAdvisor (ECOM) 5.75M share IPO priced at $14.00
Constellium Holdco (CSTM) 22.2M share IPO priced at $15.00
Equity Residential (EQR) announces 15.07M common share at-the-market offering
Global Brass & Copper (BRSS) 7M share IPO price $11.00
Laclede (LG) 8.7M share Secondary priced at $44.50
Oaktree Capital (OAK) 7M share Secondary priced at $53.50
Ply Gem (PGEM) 15.789M share IPO priced at $21.00
Teekay LNG (TGP) enters into $100M equity distribution agreement
Wesco Aircraft (WAIR) 15M share Secondary priced at $16.00